Tuesday markets
“A real correction is underway today in CME cattle futures,” Cassie Fish, market analyst, wrote for The Beef. “After rallying early and making new highs for the move in most active December and February live cattle futures, futures have taken out yesterday’s lows and are making new lows for the week. Futures are trading below Friday’s settlement and technical indicators have once again rolled over. This looks to be the second meaningful correction in October.”
Live cattle futures were lower, with the October contract down 87 cents to $189.30 and the December contract down $1.32 to $187.95.
Cash trade was moderate, with 6,496 head sold. Live steers sold for $189-190, averaging $189.09.
On the formula side, 26,200 head averaging 906 lbs. sold for an average of $304.32.
The national weekly direct beef type price distribution for the week of Oct. 14-21 was the following on a live basis:
• Negotiated purchases: $190.16.
• Formula net purchases: $190.53.
• Forward contract net purchases: $188.11.
• Negotiated grid net purchases: $191.77.
On a dressed basis:
• Negotiated purchases: $298.86.
• Formula net purchases: $300.91.
• Forward contract net purchases: $297.70.
• Negotiated grid net purchases: $299.96.
Today’s slaughter is estimated to be 124,000 head, 1,000 head above a week earlier.
Boxed beef prices were lower on 150 loads, with the Choice cutout down $3.09 to $320.41 and the Select cutout down $2.22 to $289.96.
“The big gains in the Choice estimated cutout value last week have leveled out this week,” Fish wrote. “Middle meats are still on very solid footing, but end meats and Select product in general is under pressure. The Choice/Select spread has pushed out over $32/cwt. The majority of the up in the cutout appears to be behind this market, though middles will see strong seasonal demand through Thanksgiving.”
Feeder cattle
Feeder cattle futures were also lower on the strength of corn. The October contract was down 5 cents to $250.02, and the November contract was down $2.60 to $246.60. The CME Feeder Cattle Index was up 12 cents to $249.49.
“The feeder cattle complex is trading lower into Tuesday’s noon hour as traders are waiting to see what develops fundamentally before they’ll likely advance the contracts much higher again this week,” ShayLe Stewart, DTN livestock analyst, wrote in her midday comments. “But even with today’s slight correction, the spot January contract is still trading above the market’s 100-day moving average which emphasizes the market’s underlying bullish nature.”
Corn futures were higher, with the December contract up 3 cents to $4.13 and the March contract up 2 cents to $4.27.
Iowa: Russell Livestock in Russell sold 2,687 head on Monday. Compared to the last auction, steers under 600 lbs. sold with a higher undertone noted on a light test last week, while heavier steers sold mostly $2-7 lower. Heifers under 600 lbs. sold with a higher undertone on a light test last week, while heavier heifers sold with a lower undertone on a light test this week. Benchmark steers averaging 714 lbs. sold for $256.50-270.25, averaging $262.94.
Nebraska: Tri-State Livestock in McCook sold 2,583 head on Monday. Compared to the last auction, steer calves over 450 lbs. sold steady to $10 higher and heifer calves over 400 lbs. sold steady to $15 higher. Around 1150 head of the bawling calves had not received fall vaccinations, most of which sold at a sizable discount, creating wide price spreads within the weighed averages. A group of steers averaging 725 lbs. sold for $270.
South Dakota: Sioux Falls Regional in Worthing sold 3,947 head on Monday. Compared to the last auction, steers 500 lbs. sold $14-15 higher, and 550 lbs. were $5-6 higher. Steers 800 lbs. sold $4 higher, 850 lbs. were mostly steady to $2 higher, 900 lbs. traded $1-2 higher and 950 lbs. sold $2 lower, with instances of $4 lower. Heifers 600 lbs. sold $7-12 higher, 700 lbs. were $1-2 lower, 750 lbs. traded $3-4 lower, 800 lbs. sold $8 higher, 850 lbs. were steady to $2 higher and 900 lbs. sold mostly $4 higher. Benchmark steers averaging 764 lbs. sold for $253-266, averaging $257.77. — Charles Wallace, WLJ contributing editor
